Reliance on Foreign Markets: Multinationality and Performance

Makoto Nakano and Bayanjargal Purevdorj
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Makoto Nakano: Hitotsubashi University

A chapter in Reliance on Foreign Markets: Multinationality and Performance, 2014, pp 1-30 from Springer

Abstract: Abstract This study examines the relationship between multinationality and the performance of Japanese manufacturing companies over the period 1999–2008 by using geographic segment information. Despite the enormous interest in and importance given to multinationality from the academic and business worlds, prior findings about the multinationality-performance relationship are conflicting and inconsistent. Our overall results show that multinationality has a positive impact both on accounting performance and market-based performance. In additional tests, Japanese electric and electronic equipment companies’ reliance on the Asian market has a negative impact on profitability and no significant impact on firm value, whereas reliance on other foreign markets such as the Americas and the EU has a positive impact on profitability and firm value. The multinationality-performance relationship cannot be generalized, and varies among geographic regions. We contribute to both the multinationality-performance literature and geographic segment reporting literature by offering empirical evidence about Japanese manufacturing companies in comparison to prior findings about US companies.

Keywords: Multinationality; Profitability; Firm value; Japanese manufacturing firms; Foreign sales (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbrcp:978-4-431-54562-0_1

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DOI: 10.1007/978-4-431-54562-0_1

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